Feature Friday: Wine war puts Okanagan vintners in a tough position

Summerhill Winery will lose 15 per cent of its business if B.C. wine exports are barred from Alberta, but CEO Ezra Cipes doesn’t have sour grapes.

After considering Alberta premier Rachel Notley’s wine ban, he spoke to the vineyard’s bistro chef and asked him to source some grass fed Alberta bison for their menu.

It’s a symbolic gesture, but one he hopes will resonate with both consumers and industry insiders who are being caught in a tug-of-war between politicians.

“I think everybody within the wine industry is feeling disheartened. We consider ourselves to be Canadian. We sell Canadian wine and we love Alberta…a number of wineries in B.C. are actually owned by Albertans,” Cipes said.

Larger scale wineries that ship their goods to Alberta see crates of wine delivered to a central government-controlled distribution warehouse. From there all independent restaurants and retailers purchase what they need— so Notley is effectively pulling up the drawbridge and blocking $160 million a year in retail sales, according to a sales estimate from the BC Wine Institute.

She’s also whipping up dissent that is affecting those who don’t tap into the same market as the Summerhills of the industry and export to Alberta on a smaller scale.

Jak Meyer is the owner of Meyer Winery in Okanagan Falls, which is poised to lose about three per cent of business under current conditions.

“We have had a few wine club members drop out just in the last few days, so those are people we were shipping wine directly to. I wouldn’t be surprised if, unfortunately, I saw a few more leave,” Meyer said.

Having lived 17 years in Edmonton before investing in the wine business, Meyer has many friends in the oil industry. His own father worked 50 years in oil.

“I get why they are so upset, but I don’t think this is the right tactic. They can get their point across without harming anyone, but I guess any Alberta businesses could argue that we are doing the same thing,” he said.

The wine war was sparked when B.C. Premier John Horgan announced Jan. 30 that his government would halt the flow of diluted bitumen through the Trans Mountain pipeline pending the outcome of what amounts to an environmental review. The pipeline expansion has an estimated worth of $7.4 billion and over the construction period is expected to add 15,000 construction jobs and 37,000 indirect and direct jobs.

Beyond pinots and pipelines, B.C. and Alberta already have the two most integrated provincial economies in the country – estimated at about $30 to $35-billion combined.

In addition to financial ties, there are strong cultural bonds with residents often living in B.C. and working in Alberta. A large portion of the Okanagan’s real estate market is tied to individuals who do just that.

That inter-connectedness between Alberta and the Okanagan, as well as a little political opportunism is what likely put the wine industry in Notley’s crosshairs, says a UBC Okanagan assistant professor of economics.

“On the coast (of B.C.) they’re sipping wine and not worrying about their jobs,” said Ross Hickey, from UBC Okanagan.

And that’s why Notley is eyeing up the Okanagan and its exports, he said. There’s not much she can do to influence change in B.C.’s political hubs right now, but the Kelowna West riding is up for grabs Feb. 14—the same day the wine ban goes into effect—and the disruption she’s causing may be directly related to that.

“Notley knows that Horgan and Green leader Andrew Weaver need to win support and seats if they want stable governance,” he said. “They can’t rely on coastal voters for all of that and she’s targeting pain where the B.C. government wants stability. This is a great time for Notley to do this.”

Hickey said he doesn’t see it going much further, however. It’s “foolish and illegal” by his estimates. Alberta could face $5 million in fines for violating the New West Partnership Trade Agreement, and there are more agreements being stepped on, said Hickey.

“With the Trade, Investment and Labour Mobility Agreement, the provinces agreed there shouldn’t be trade barriers of goods and services between Alberta and B.C.,” said Hickey. “The exceptions to that rule occur in the case of environmental protections. What the B.C. government is doing isn’t prohibiting trade and flow of trade…they want to review environmental policy that would apply to the bitumen products that Alberta exports.”

Hickey said that the question at play is simply if bitumen were to spill from a future pipeline, who is on the hook to clean it up.

“Our province has to be responsible and do its due diligence,” he said, adding if Alberta were to approach B.C. hat in hand and offer to foot the bill, the review process would go away.

“The trade and labour agreement we signed with Alberta allows us to do that to protect our environment. What it doesn’t allow us to do is ban Alberta beef because we’re mad.”

Similarly, he said, it doesn’t allow the Alberta government to say “we’re unhappy so we aren’t playing by the rules.”

“It’s foolish and childish,” said Hickey. “This is just a show. There is so much surplus being generated by the trade flow, that in the long term we will see the return of happy trade. ”

Hickey isn’t the only one who thinks Notley’s trade war is childish.

Josh Jamroziak is the manager of Blink Restaurant and Bar in Calgary and said he thinks the whole thing lacks merit and could even hurt local business.

“I think it’s pretty childish. We do sell B.C. wines here, especially to tourists,” he said. “B.C. wines have made such a big name for themselves worldwide, when the tourists come in they always want to try it. If we don’t have that anymore then the opportunity is gone for us.”